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Unformatted text preview: MAD ABOUT TRADE is something ignoble, even grubby, about wanting more and wanting
it “cheap.” We liken consumption to acquisitiveness and greed. Con-
sumption in the minds of many means four cars in the driveway, a
triple-decker cheeseburger, and a 52-inch ﬂat screen TV bought with
a credit card at 18 percent annual interest. Consumption can be abused, but it is also life itself. Without
consumption, we would all be starving, naked, homeless, and
quickly dead. Consumption is the proper end of all economic activ-
ity. We do not start a business or show up at work every day just
to be there but because we seek to be rewarded in a tangible way.
And the paychecks or proﬁts we earn do us no good unless we can
translate them into goods and services with real value—a place to
live, a car, clothes, food, that big-screen TV, tuition for the kids, a
donation to church or charity. Production divorced from consump-
tion is akin to slavery. The founder of modern economics, Adam Smith, understood
clearly that the argument for free trade begins with the consumer.
As he wrote in his 1776 book, An Inquiry into the Nature and Causes
of the Wealth of Nations: Consumption is the sole end and purpose of all production;
and the interest of the producer ought to be attended to,
only so far as it may be necessary for promotion of the
consumer. The maxim is so perfectly self-evident, that it
would be absurd to attempt to prove it. But in the mercantile
system, the interest of the consumer is almost constantly
sacrificed to that of the producer; and it seems to consider
production, and not consumption, as the ultimate end and
object of all industry and commerce.2 By the “mercantile system,” Smith meant one based on protecting
domestic producers against their foreign competitors regardless of
the impact on consumers. The multiple trade barriers that still exist
are holdovers from the mercantilist thinking of the 17th and 18th
centuries that Smith intellectually demolished in his great work. We
can’t begin to understand the benefits of free trade without shedding
the old, producer-focused way of thinking and instead consider the
well-being of American families as consumers. Here is where trade
delivers the greatest benefits to the widest possible number of
Americans. 12 America’s Consuming Interest in Trade Beneﬁts of Import Competition Politicians and critics of trade tend to belittle the consumer bene-
fits. Their sympathies lie with producers, or more accurately, certain
noisy producers, and so they are quick to dismiss any argument
that trade broadly beneﬁts consumers. For example, in his 2004 book,
Exporting America, CNN host Lou Dobbs dismissed any concerns
for consumers. “I don’t think helping consumers save a few cents
on trinkets and T-shirts is worth the loss of American jobs,” he wrote.3 When he was running for president in 2007, then-Sen. Barack
Obama was equally dismissive of consumer worries about higher
prices. At a Democratic primary debate in Chicago, moderator Keith
Olbermann of MSNBC asked the reasonable question, “If buying
American costs more, and in many cases it does, how do you con-
vince a working family that’s struggling to get by on a tight budget
and in part makes ends meet using $10 T-shirts for their kids, that
buying American is still best for them no matter what the price is?”4 Before a stadium full of cheering union members, Senator Obama
basically said, “let them pay more”: “Well, look, people don’t want
a cheaper T-shirt if they’re losing a job in the process. [Applause]
They would rather have the job and pay a little bit more for a T-
shirt. And I think that’s something that all Americans could agree
to.”5 Like most politicians, he chose to favor the noisy producer
interests over the silent, suffering consumer. When it comes to T-shirts, most Americans have a consuming
and not a producing interest. Virtually all of America’s 114 million
households (most of them “working families”) buy shirts every year.
In fact, Americans buy 4.5 billion T-shirts and other apparel tops
each year, 94 percent of them imported.6 That’s an average of almost
40 shirts per household. But very few American workers, less than
half a million, make their living producing T—shirts, other apparel,
and textiles? Yet Senator Obama and the union audience clearly sided with the
one-third of one percent of American workers (many of them still
unionized) who make shirts and other clothing rather than the 99.7
percent who unambiguously gain from being able to buy their cloth-
ing at more affordable prices. Democrats and their union allies were
not representing “working families” against big corporations but a
small and declining share of US. producers and their employees at
the expense of the vast majority of American households. 13 MAD ABOUT TRADE Lou Dobbs and Barack Obama are both guilty of exaggerating the
impact of imports on American workers and of minimizing the
beneﬁts of imports for American consumers. A well-paid television
personality in New York City or a politician in Washington need
not care about the price of a T-shirt or other everyday consumer
items, but millions of American families, especially those living on
low and middle incomes, do care. Our freedom to buy in the global
marketplace beneﬁts American families in three major ways. Lower prices Open markets keep a lid on prices. A domestic producer who
tries to raise prices runs the risk of being undercut by a foreign
competitor. An open market makes it more difficult for domestic
producers to “conspire” with one another to raise prices at the pub-
lic’s expense. As a result, the prices we pay for goods and services
exposed to global competition tend to rise more slowly or even fall
compared to prices paid for goods and services where competition
is limited to the domestic or local market. Table 2.1 shows the change in prices between 2000 and 2007 for
an assortment of products and services. Price changes cover a wide
spectrum, from an 81 percent fall in the (quality-adjusted) prices
paid for personal computers and accessories to the 71 percent jump
in what we pay for college tuition and fees. By comparison, the
overall price index for all urban consumers during that same period
rose 24 percent.8 With a few exceptions, the unmistakable pattern is this: The prices
we pay for goods most exposed to international competition rise
more slowly than overall prices, and for many categories, the prices
actually fall. Meanwhile, the prices we pay for goods and services
that are insulated from global competition tend to rise faster than
inﬂation. Among the goods globally traded are consumer electronics, toys,
clothing, shoes, household goods, and new cars. Those are the same
sorts of goods that have gone up the least or even fallen in price.
This trend is no coincidence. Among the goods and services least
likely to be traded across borders are college tuition, medical care,
electric utilities, cable TV, admission to sporting events, and auto
repair. Again, it is no coincidence that those services also lead the 14 America’s Consuming Interest in Trade \
Table 2.1 COMPETITION AND PRICE CHANGES PERCENTAGE CHANGE, JANUARY 2000 TO DECEMBER 2007
x Price Changes below Inﬂation % Change Price Changes above Inﬂation ‘X: Change
R
Personal computers and peripheral equip, —80.7 Laundry and dry cleaning services 24.6
Televisions —70.8 Haircuts and other personal care servioes 25.6
Toys —36.0 Full-service meals and snacks 25.6
Dishes and ﬂatware -25.3 Fruits and vegetables 30.8
Wireless telephone services —20.6 Motor vehicle repair 31.5
Infants' and toddlers' apparel — 14.6 Rent of primary residence 32.0
Men’s and boys' apparel —13.3 Garbage and trash collection 32.2
Sports equipment — 12.2 Admission to movies, theaters, and concerts 32.5
Men’s footwear —5.7 Prescription drugs 33.3
Women’s and girls' apparel —5.7 Cable and satellite television and radio service 35.8
New cars and trucks —4.7 Household electricity 40.9
Music instruments and accessoria -3.5 Bread 41.0
Women’s footwear 3.8 Admission to sporting events 44.7
Breakfast cereal 7.4 Dental services 44.7
Roasted coffee 9.9 Veterinarian services 58.8
Peanut butter 12.0 Inpatimt hospital services 65.9
Sugar and artificial sweeteners 16.8 College tuition and fees 715
Eyeglasses and eye care 16.9 Consumer Price Index 24.4 R
SOURCE: Bureau of Labor Statistics, US. Department of Labor. list of steepest price increases. Many of those services are not “pro-
tected” by government-imposed trade barriers but rather by the
nature of the service, yet the result is the same: less domestic competi-
tion and a greater ability on the part of producers to saddle consum—
ers with higher prices. Higher prices mean that we can buy less with our paychecks and
other earnings. A higher consumer price index translates into lower
real wages, compensation, and household incomes. Erecting barriers
to trade may “protect” certain industries and their workers, but they
rob workers in every other sector by diminishing the value of what
they earn. Some of the tradable items in the table do face trade barriers, but
the tariffs our government imposes on shoes, clothing, tableware,
and musical instruments have not stiﬂed trade completely but only
slowed its growth. Without tariffs, prices would have fallen even
further, to the benefit of American consumers. And prices have also
gone up, sometimes sharply, for such freely tradable commodities
as fruits and vegetables and crude oil. But commodities are more
prone to natural price swings than manufactured goods, and we 15 MAD ABOUT TRADE can be certain that prices would have been even higher if import
competition had been curbed by artiﬁcial trade barriers. Another seeming anomaly on the list is prescription drugs. In
2007, Americans imported $71 billion worth of medicinal, dental,
and pharmaceutical preparations, making it one of the more heavily
traded product categories. Yet the average price level for prescription
drugs since 2000 has risen faster than inﬂation. One plausible expla-
nation is a trade restriction of sorts—the US. government’s granting
of patents for brand-name drugs. Patents are in essence temporary
monopolies granted by the government to the creators of an innova-
tive product such as a new medical drug. The purpose behind patents is to encourage investment in break-
through products by allowing the people and companies that
develop the new products to beneﬁt the most. Otherwise, one com-
pany would invest heavily in researching and developing a new
drug, only to have other producers immediately co-opt the formula,
driving down prices. Companies would then lose the incentive to
innovate, depriving the public of potential medical advances. To
make drug patents effective, the US. government has also imposed
restrictions on the “re—importation” of U.S.—made drugs that have
been sold abroad at prices lower than what they are sold for here
in the United States. Without taking sides on the re-importation issue, it’s worth noting
that some of the same members of Congress who complain the
loudest about free trade and “unfair” import competition are also
leading the charge to lift restrictions on drug re-importation so that
American consumers can enjoy the beneﬁts of lower prices. If only
they cared as much about lowering prices for food, clothing, and
shoes as they do for lowering prices for Viagra. Import competition might be one reason that inﬂation rates are
lower than in past decades. As the late Nobel Prize—winning econo-
mist Milton Friedman explained, inﬂation is ultimately caused by
the creation of too much money by the central bank, but lower trade
barriers can help to moderate price increases by breaking the power
of domestic monopolies and oligopolies to charge higher prices. As
the United States and other major economies have become more
globalized in the past two decades, global inﬂation fell from 30
percent in the early 19905 to 4 percent by 2003. Inﬂation ticked up
recently during the spike in oil and food prices, but it is nowhere 16 America’s Consuming Interest in Trade near where it was 15 or 30 years ago. By making workers more
productive and prices more ﬂexible, open markets have reduced
pressure on central banks to inﬂate the money supply. Our expand-
mg freedom to trade assets and currencies has given Americans
more options to shield themselves from the impacts of inﬂation.9 More Choice and Variety Free trade delivers real benefits for American families not only
through lower prices but also by enriching the variety of products
and brand names we can buy. More choices among similar products
increase our satisfaction as consumers. Instead of one-size- or one-
taste-fits-all, we can choose the brand or ﬂavor that gives us the
greatest satisfaction. Consider imported beer. Even if imports did
, not cause the price of a six-pack to drop, consumers are still better
-. off if they can choose among not only Miller High Life, Old Milwau-
’ kee, and Coors but also Heineken, St. Pauli Girl, and Newcastle
Brown Ale. Increased variety can have the same effect on our well-
= being as a drop in prices. Free trade means we can buy fresh-cut ﬂowers from Colombia in
~ the middle of winter along with fresh fruit from Chile and fresh
vegetables from Mexico. Free trade means we are more likely to
find the style and size of shirt we want on the shelves at the depart-
ment store. A more sophisticated global supply chain has allowed
:' such retailers as ].C. Penney to cut the time it takes for a junior
3: fashion design to go from concept to the store from 70 weeks a
I: decade ago to 17 weeks today.10 ‘ 'I'he consumer benefits of variety can be harder to quantify than
j... a Simple drop in price, but they are just as real. Two economists for
3- the National Bureau of Economic Research calculated the consumer
benefits of increased variety in a 2004 study, and the beneﬁts add
.- up to hundreds of billions of dollars. Authors Christian Broda and
3' David E. Weinstein built their study on the pioneering insight of
:the liberal Nobel Prize—winning economist and New York Times col-
umnist Paul Krugman that consumers do not care just about the
price of imports but also even subtle differences in similar products.
.__‘;~As the NBER authors succinctly put it, “Consumers value variety ”
.which free trade delivers in abundance.11 ’
3- If trade delivers more brands while keeping prices in check, we
better off. In fact Broda and Weinstein calculate that the global 17 MAD ABOUT TRADE varieties available to Americans multiplied four-fold between 1972
and 2001. “Roughly half of this increase appears to have been driven
by a doubling in the number of goods and half by a doubling in
the number of countries supplying each good,” the authors found.12
Adjusting for the beneﬁts of increased variety, they calculate that
import prices actually fell 1.2 percent faster than ofﬁcial statistics
showed. As a result, the real incomes of American families are about
3 percent higher because of the greater variety that imports bring.13
That’s not “a few cents”; it’s nearly $400 billion in our current econ-
omy. That ﬁgure translates into a real gain of $1,300 per person or
more than $5,000 for a family of four just from the expanding varie-
ties that trade has brought to the marketplace. Trade with China
has done more to expand the variety of imports we enjoy than trade
with any other country, but more on that in a moment. Better Quality A third beneﬁt of free trade for American consumers is higher
quality. Nowhere have Americans witnessed the improved quality
from trade more noticeably than in the automobile market. When I
ﬁrst began to drive in the mid-19705, the American market was
dominated by the Big Three. American automakers and their unions
had grown fat and happy with their exclusive franchise of making
big and powerful cars for the world’s largest domestic car market.
Imported Volkswagens and Toyotas were seen back then as rather
exotic. Now it is the boxy, unreliable, and gas-guzzling American
cars of that day that seem exotic, like four—wheeled dinosaurs des-
tined for extinction. Three decades of oil spikes and vigorous foreign competition have
transformed the US. auto market. Today foreign-brand vehicles
account for more than half the cars and light trucks sold in the
United States. Along with the increased competition have come more
moderate price increases, greater variety, and, yes, better quality.
Today’s cars are safer, better designed, more loaded with extra fea-
tures, and more fuel efficient for their class. It was Japanese automak-
ers who introduced crossover utility vehicles, hybrid vehicles, and
small light trucks to the American market. According to an October
2008 poll commissioned by the Japanese Automobile Manufacturers
Association, 79 percent of Americans agreed that competition from 18 America’s Consuming Interest in Trade Japanese automakers has spurred the Big Three to offer hybrid tech-
E' nologies and more fuel-efﬁcient vehicles.14 Trade skeptics have been quick to jump on safety concerns about , toys and pet food imported from China. Those concerns are real, but they spring from breakdowns in quality control, not from trade
itself. US. regulators have every right under intemational law to
impose exactly the same safety and health standards on imported
products as they do on products made domestically. Poisoned pet
food or toys with lead paint are just as much a safety concern whether
they come from abroad or another state. In the past three years,
Americans have been sickened and even killed by baby spinach
from California and ground beef from Nebraska tainted by E. coli
bacteria, chicken from Pennsylvania tainted with listeria, and peanut
butter and peanut products from Georgia tainted with salmonella.
The regulatory challenges are no different. Importing goods from
less-developed countries need not lead to any lowering of health
and quality standards. How Imports from China Improve Our Daily Lives It seems an American cannot go shopping today without buying
something “made in China.” Our store shelves brim with products
made, or at least assembled, by workers in the world’s most populous
nation. Factories in China specialize in goods that are especially
attractive to consumers in the United States, so it only makes sense
that the world’s richest consumer nation would buy lots of stuff
every year from one of the world’s leading makers and exporters
of consumer goods. Of those 2,133 containers that arrived every
hour in 2007, slightly more than 1,000 came from China.15 Most of what we import from China are everyday consumer goods
that make our lives better at home and work. As Table 2.2 shows,
more than 80 percent of the goods imported from China in 2007
were consumer products: laptop computers, iPods and MP3 players,
furniture, shirts, shoes, sporting goods, TVs and DVD players, and
ofﬁce products.16 China was the source of 80 percent of America’s
imported toys, sporting goods, and bicycles; 73 percent of imported
footwear; 68 percent of imported radios, CD players, and other audio
equipment; and more than half of imported computers, furniture,
and household items.17 19 MAD ABOUT TRADE Table 2.2
WHAT WE BUY FROM CHINA
(2007 imports in billions of US. dollars) Consumer Products Computers and telecommunication equipment 72.4
Furniture, appliances, household goods 56.4
Apparel and footwear 51.6
Toys and sporting goods 27.6
TVs, radios, dvds, cameras 23.5
Vehicles and parts 9.5
Printed matter, writing supplies 7.1
Food, paper and energy 5.7
Jewelry, artwork, and miscellaneous 4.8
Miscellaneous 3.9
Total 262.3
Industrial Goods
Industrial machinery 30.9
Steel and other metal products 11.0
Building materials 5.2
Packing materials 4.7
Chemicals 4.4
Textiles 2.9
Total 59.2
Total Goods Imported 321.5 Although China is now the number one source of imported goods
for the US. economy, 85 percent of what we import still comes from
countries other than China. And Chinese imports must be seen in
the context of the US. economy that in 2008 produced $14 trillion
worth of goods and services. There is nothing wrong with the fact
that Americans spend the equivalent of 2 percent of our national
income on things put together by the one-fifth of mankind that lives
in China. Imports from China have delivered lower prices on goods that
matter most to the poor, helping to offset other forces in our economy
that tend to widen income inequality. In a 2008 study, two econo-
mists from the University of Chicago confirmed the pro-poor bias
of imports from China. Christian Broda and John Romalis calculated 20 America’s Consuming Interest in Trade “ that between 1994 and 2005, the inﬂation rate for goods bought by
US. households in the lowest tenth percentile of income was 6
';. percentage points lower than inﬂation for goods bought by families in the top tenth percentile. Lower-priced imports from China were
a big reason why. “Since Chinese exports are concentrated in low-
quality non-durable products that are heavily purchased by poorer
Americans, we find that about one-third of the relative price drops
faced by the poor are associated with rising Chinese imports,” they
concluded.18 Broda and Romalis found that trade with China has
helped to offset nearly a third of the ofﬁcial rise in income inequality
during this period. Lower prices on goods imported from China
have more than compensated for any downward pressure on low-
skilled wages because of U.S.-China trade. Imposing punitive tariffs on imports from China would be a direct
tax on tens of millions of working families in America. Some mem-
bers of Congress have proposed that the US. government drastically
raise tariffs on Chinese goods. Sens. Charles Schumer, a New York
Democrat, and Lindsey Graham, a South Carolina Republican,
offered a bill in 2005 that would have imposed a 27.5 percent tariff
on Chinese goods unless Chinese authorities allowed their currency
to rise in value compared to the dollar. Sen. Byron Dorgan, a North
Dakota Democrat, has proposed revoking “normal trade relations”
with China, which would expose Chinese imports to prohibitively
high tariff rates. Imposing steep tariffs on imports from China would, of course,
hurt producers and workers in China, but it would also punish
millions of American consumers through higher prices for shoes,
clothing, toys, sporting goods, bicycles, TVs, radios, stereos, and
personal and laptop computers. It would disrupt supply chains
throughout East Asia, invite retaliation, and jeopardize sales and
profits for thousands of US. companies now doing business with
the people of China. Sanctions of the kind contemplated in Congress
would also violate the same set of international trade rules that
members of Congress accuse China of violating. Exchange—rate policies can also bite into family budgets. Certain
U.S. producers tend to favor a weak dollar vs. China’s yuan because
it makes US. exports more competitive abroad and Chinese imports
less competitive in our domestic market. But the exchange rate is a
double-edged sword. A weak dollar also drives up import prices 21 MAD ABOUT TRADE for American families and import-using producers. It is no coinci-
dence that the upward spike in global food and energy prices in
2007 and 2008 followed a major decline in the value of the US.
dollar. When the dollar is worth less compared to other currencies,
foreign producers will demand more dollars before they sell us a
barrel of oil or a ton of rice. American families lose when the dollars
in their pockets and checking accounts buy less in global markets. Imports from China are just the kind of consumer goods that
millions of low- and middle-income families buy at discount stores
throughout the year, but especially during the Christmas shopping
season. Imports from China tend to spike upward in August through
November compared to the rest of the year as importers rush to ﬁll
store shelves in anticipation of the holiday shopping rush. Whereas
imports from our other major trading partners also typically rise 10
to 15 percent on a seasonal basis, peaking in October, imports from
China surge an average of 20 to 30 percent from August through
October each year compared to average monthly imports throughout
the year.19 If the Grinch who tried to steal Christmas were in the
US. Senate, he would gladly co-sponsor higher tariffs on imports
from China! How Big-Box Retailers Deliver the World The principal channel through which American families enjoy the
beneﬁts of imports is American retailers, especially the “big box”
stores such as Wal-Mart, Home Depot, and Best Buy. Access to
global markets has allowed retailers to expand the range and variety
of products we can buy and keep prices significantly lower than
they would be if they were not able to source abroad. Wal-Mart, for example, buys its products wholesale from a net-
work of 60,000 suppliers worldwide. It now imports more than $20
billion a year from China alone. But sourcing from abroad is not
just a Wal—Mart phenomenon; Target, Home Depot, Sears, Lowes,
Kmart, Best Buy, Office Depot, Staples, and Costco are also major
importers. IKEA furniture stores import a large share of their furni-
ture from China. 2° In fact, imports bound for Wal— Mart stores
accounted for less than 4 percent of those 18 million containers
entering U.S. ports in 2006.21 Imports have allowed big box retailers to multiply the variety of
goods on their shelves, especially compared to the corner hardware 22 America’s Consuming Interest in Trade and grocery stores that were the only option when I was growing
up in a small town in the Midwest. A typical Wal-Mart store today
will stock 60,000 different items, a supercenter 120,000.22 As we saw
earlier, more choice means more customer satisfaction per dollar
spent. In his sometimes critical but fair-minded book, The Wal-Mart
Effect, author Charles Fishman accurately captured the phenomenon:
“Step inside a Wal-Mart, pause brieﬂy at the threshold—with two,
or three, or four acres of brand-new goods before you piled to the
ceiling—and at that moment you command a cornucopia from every
comer of the globe that wasn’t available, not even to the richest and
most powerful, one hundred years ago.”73 The price savings from the big-box retailers are just as striking,
especially when it comes to groceries. Food prices at a Wal-Mart
supercenter are typically 15 to 25 percent lower than at traditional
grocery stores and supermarket chains. Even families that do not
shop at a Wal-Mart benefit because the competition keeps prices
lower than they would be otherwise at the traditional stores. Savings
are greatest for lettuce, ham, butter/margarine, apples, yogurt, cof-
fee, ice cream, potatoes, tomatoes, and bottled water. 2‘ Fishman esti-
mates a family of four with an income of $52,000—middle class by
any definition—saves about $900 a year by shopping at a Wal-Mart. Those cost savings enabled in part by global sourcing are even
more important for low-income families. In a 2005 study for the US.
Department of Agriculture, authors Jerry Hausman and Ephraim
Leibtag found that buying groceries at a supercenter allowed upper-
income families to save the equivalent of 20 percent of their food
expenditures, but for low-income families, the savings approached
30 percent. As the authors concluded, “The spread of supercenters
has the greatest impact on poorer households and minority house-
holds. Thus, the spread of supercenters has favorable distribution
effects across the population.”25 The pro-poor impact of the big-box
retailers is one reason why spending at Wal-Marts continued to
increase in the depths of the 2008-09 recession as sales plunged at
other, more expensive retailers. As one major newspaper noted in
a headline, “Wal-Mart Flourishes as Economy Turns Sour.”26 Afford-
able, imported staples have extended a more immediate and effective
lifeline to families struggling to stay aﬂoat during tough economic
times than any lumbering government stimulus package. Others in the political arena understand the consumer and distri-
butional benefits of big-box retailers plugged into a global market. 23 MAD ABOUT TRADE Jason Furman, who now serves as a top economic adviser to Presi-
dent Obama, remarked at a public debate in 2005: “The lower prices
at Wal—Mart are staggering. They are eight to 40 percent lower than
what people would pay elsewhere. The total annual savings in one
recent study . . . for consumers are $263 billion. That’s $2,300 for
every household in America. There are very few public policies
that I’ve advocated in my life that would make as big a difference
as that.” Political opposition to big-box retaﬂers has been spearheaded by
organized labor. Workers at Wal-Mart and other mass retailers tend
to be nonunion, while workers at many grocery-store chains belong
to the United Food and Commercial Workers Intemational Union.
The union sees double competition in the supercenters, both from
their nonunion workers as well as the goods they sell that are pro-
duced by foreign workers and farmers. Domestic unions have caught
the ear of politicians who tend to ignore the consumer beneﬁts of
competition while responding to the noisy producer interests who
want to stiﬂe competition at the expense of most working families. Trade Policy As If Consumers Mattered After he dismissed concerns about the cost of clothing during
the 2007 primary debate, then-candidate Obama asked rhetorically,
“[O]n whose behalf is the president negotiating [trade agreements]?
Is he or she negotiating on behalf of the people in this stadium, or
are you only negotiating on behalf of corporate proﬁts? And that is
an important issue and it’s an important distinction that we’ve got
to make.” Good question. Should we design our policies toward imported
T-shirts and other “sensitive” products in order to pad the profits
of the few domestic companies that still make those products and
thus beneﬁt the small slice of the US. workforce they still employ?
Or should our policies be designed for the beneﬁt of the tens of
millions of Americans, including poor families living on the edge,
who buy those T-shirts, shoes, and socks to clothe themselves and
their children? Barack Obama won the cheers that day of union
members, but who in that stadium was representing the single
mother who must struggle to pay the duties our government imposes
on imported goods that loom large in her budget? 24 America’s Consuming Interest in Trade Unfortunately, for all his talk about change, Sen. Obama that day ”‘5' sounded like most politicians who typically ignore the interest of
-‘ 3. Americans as consumers. They pander to the squeaky wheels, and in the trade debate, that almost always means a few producers rather
than consumers. As we’ve seen, the benefits of free trade are diffused
widely among more than 100 million households. Although the
cumulative savings are huge, they are realized in small doses—just
the right product available when you want it, increased satisfaction
with that new car or laptop, or a $20 dollar savings from a Saturday
trip to the shopping center. But many consumers are not even aware of those beneﬁts or the threat posed to them by protectionist legisla-
'~: tion. And even if awareness did grow among consumers, it is daunt-
ing to organize millions of diverse people into an effective politi-
"‘ cal coalition. Adopting a pro-consumer, pro-middle-class position on trade 7 would transform the debate in Washington. Lowering our own trade barriers to imports would not be seen as a “concession” we make
to other countries in order to coax them to lower their barriers to .‘ our exports. Free trade is a policy we can adopt right now to make our lives better. When other countries keep their trade barriers higher
than we keep ours, that is not evidence of “unfair trade” but of
misguided trade policies on the part of the other governments, poli—
cies that hurt our exporters, to be sure, but that are just as damaging ' to the other countries’ consumers and overall economies. Just because other countries pursue trade policies that hurt the
large majority of their own citizens is not an argument for our own
government to do the same to us. To insist on a “level playing field”
is to demand that our government adopt or maintain trade policies :1. that are as misguided and self-damaging as those of other countries. We should insist that our government adopt trade policies that are
best for most Americans, regardless of what other countries do. And
that means pursuing trade policies that spread beneﬁts to the widest .I' possible number of Americans, especially the poor and middle class who have the most to gain from removing the ﬁnal remaining barri-
ers that separate us from the global marketplace. 25 ...
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